thinking about your future? plan for your long-term care needs

Transcription

1 Long-Term Care Services SM Rider thinking about your future? plan for your long-term care needs Life Insurance Products: Are Not a Deposit of Any Bank Are Not FDIC Insured Are Not Insured by Any Federal Government Agency Are Not Guaranteed by Any Bank or Savings Association Variable Life Insurance May Go Down in Value

2 The Long-Term Care Services SM Rider 1 can be added at issue to certain permanent life insurance policies. The death benefit of the policy can, in certain circumstances, be accelerated to pay for qualified long-term care services, thereby helping you pay for some of your long-term care needs. This rider is available for an additional cost. Receipt of the accelerated benefits may be taxable; therefore, you should seek assistance from a tax advisor. the real need for long-term care You may have read the magazine articles or seen the news programs that discuss the health care issues that are facing future retirees. In fact, as baby boomers head into retirement, our country will be confronted with the reality that by the year 2020, an estimated 12 million elderly Americans will require some form of long-term care. 2 Many will be cared for by family and friends. But millions of others will rely on professional care either at home or in long-term care facilities. The question that you may be asking yourself is, Am I financially prepared for the ongoing expenses associated with this care? 1 In some states, we are required to refer to this rider as a Long-Term Care Insurance Rider. In Massachusetts, this rider is called the Accelerated Death Benefit for Chronic Illness Rider. 2 National Clearinghouse for Long-Term Care Information, Updated October 2008.

3 The High Cost of Care Depending on where you live and the type of assistance you require, long-term care costs Long-term care benefits are generally triggered if the Insured can easily climb over $75,000 per year. 3 In needs substantial assistance to perform at least two of some states, that cost can be much higher. At these rates, family nest eggs and a lifetime the activities of daily living, which include: eating, bathing, of retirement savings can be depleted quickly. dressing, toileting continence and transferring, or if the Yet, many Americans still do not own Long-Term Insured has a significant cognitive impairment. Care insurance (LTCi). A common misconception among people without LTCi is that Medicare will cover these costs. The truth is, Medicare does not cover custodial long-term care meaning care to perform necessary daily activities of living (as defined in the Internal Revenue Code Section 7702), such as eating, bathing and dressing. Medicaid, however, may cover the costs associated with custodial long-term care, but recipients must meet strict income eligibility criteria and are restricted to Medicaid-approved services and facilities. Aside from the unpleasant thought of becoming unable to independently carry out the activities of daily living, or becoming substantially cognitively impaired, the foremost obstacle preventing many from buying LTCi is cost: LTCi can be expensive. In fact, only 21% of adults say they have LTCi, and for those who don t, the most common reason cited is cost. 4 Buying a policy at an earlier age may decrease the cost of premiums substantially. But, purchasing a policy 30 or 40 years in advance of when it may be needed if it is ever needed often makes potential policy holders uncomfortable, lest there be better or different options in place by the time they are ready to collect their benefits. 3 National Clearinghouse for Long-Term Care Information, Updated February The Kaiser Family Foundation Public Opinion Poll Report, December 2007.

4 The Long-Term Care Services SM Rider There is another way to help protect yourself and your family should you have a need for life insurance and eventually require long-term care. Rather than purchasing a separate LTCi policy, you might consider purchasing the Long-Term Care Services SM Rider in conjunction with a new permanent life insurance policy. While life insurance ensures that your loved ones will receive immediate funds in the event of your death, the Long-Term Care Services SM Rider allows you to utilize some or all of the Long-Term Care Specified Amount to pay for qualified long-term care services. The Long-Term Care Services SM Rider is not a stand-alone LTCi policy, but it can provide funds for long-term care services should the need arise. Though the Long-Term Care Services SM Rider may not cover all costs associated with your care, it may certainly help defray the financial burden. Therefore, other than your life insurance policy, assets you have earmarked for retirement and bequests may be protected and can be used as you intended, rather than possibly being depleted to provide for your care. Fifty-four percent of workers are not confident about having enough money for 5 long-term care expenses. The actual amount you can receive is the Long-Term Care Specified Amount, which is equal to the policy s initial Face Amount. Certain policy transactions, such as a reduction in the policy s Face Amount, can reduce the Long-Term Care Specified Amount. Some restrictions may apply. See the Policy Rider Form for more information. 5 The Employee Benefit Research Institute Retirement Confidence Survey, April

5 Choosing Your Coverage When you apply for the permanent life insurance policy and elect the Long-Term Care Services SM Rider, you will designate the Face Amount of life insurance needed, along with the long-term care maximum monthly benefit amount percentage: either 1%, 2% or, in some cases, 3% of the policy Face Amount (see chart below). If you begin collecting long-term care benefits, the amount of each payment will be treated as a lien against, and therefore will reduce, the policy death benefit, account value and cash value. As with the decision to purchase any type of insurance product, check with your financial professional to see if a permanent life insurance policy with the Long-Term Care Services SM Rider may be able to work for you. Minimum and Maximum Issue Ages for the Benefit Amount Percentages: Maximum Face Amount at Issue: 1% Issue ages $5,000,000 2% Issue ages $2,500,000 3% Issue ages $1,666,666 3

6 If You Don t Use It, You Don t Lose It To fund your monthly benefit payment, the Long-Term Care Services SM Rider accelerates the death benefit (not to exceed the Long-Term Care Specified The HIPAA limit for 2010 is $290 per day. This daily benefit limit is Amount) of your life insurance policy adjusted annually for inflation. For purposes of calculating the Maximum at the level you have chosen, up to Monthly Benefit payment, we limit the payment to 200% of the HIPAA a maximum of 200% of the Health limit (100% in New York) and assume a 30-day month. For 2010, this Insurance Portability and Accountability produces a benefit payment limit of $17,400 per month. There is an Act (HIPAA) limit (100% in New York). overall Maximum Monthly Benefit of $50,000. However, unlike stand-alone LTCi policies that you may pay into and never use, if you have the Life Insurance/Long-Term Care Services SM Rider combination and never need long-term care, the full death benefit of your life insurance policy passes to your beneficiaries when you die. In other words, if you do not use your long-term care protection, although you have paid the rider charge for the option to accelerate the death benefit, you haven t spent decades paying premiums for a policy that never pays any benefit at all. Additionally, if you begin collecting monthly benefits under the Long-Term Care Services SM Rider but do not receive the full death benefit of your policy, the remaining death benefit will be paid to your beneficiaries at your death. Long-Term Care Services SM Rider A life insurance policy with the Long-Term Care Services SM Rider provides a single strategy to meet your financial protection needs. If needed, you can accelerate all or part of the Long-Term Care Specified Amount, which can be used to help pay long-term care expenses. Any part of the death benefit not accelerated for long-term care expenses will be paid to beneficiaries at your death. Protect What s Important If you were asked what s important to you, most likely you would name loved ones. That s why you intend to protect them by owning life insurance. But, consider their response if asked the same question: they would most likely name you. Life insurance will help provide for the people who matter the most to you when you re gone. But think about what could happen if you are still living, yet unable to independently care for yourself the emotional impact would be great, but the same might be said for the financial impact. No one wants to become a financial burden to his or her family. Help secure your family s financial future and yours with a combination of Life Insurance and the Long-Term Care Services SM Rider. Protect what s important: the quality of their lives and yours. 4

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8 Actual terms and conditions of the Long-Term Care Services SM Rider are contained in Rider form #R06-90 and state variations. This rider has exclusions and limitations and may not be available in all jurisdictions or may vary in your jurisdiction. This rider is not available in Washington State. The applicable life insurance product brochure must accompany this Long-Term Care Services SM Rider Planning Perspectives. In addition, in the case of a variable life insurance policy, this brochure must be preceded or accompanied by the applicable current variable life insurance prospectus and applicable prospectus supplements, which contain more complete information about the policy, including risks, charges, expenses and investment objectives. You should review the prospectus and consider the information carefully before purchasing a policy. Life insurance products are issued by AXA Equitable Life Insurance Company (AXA Equitable), New York, NY, or affiliate MONY Life Insurance Company of America (MONY America), an Arizona Stock Corporation, main administrative offices in New York, NY. MONY America is not licensed to do business in New York. Life insurance products are co-distributed by AXA Advisors, LLC and AXA Distributors, LLC. All companies are affiliated and directly or indirectly owned by AXA Equitable Financial Services, LLC, and do not provide tax or legal advice. You should consult with your tax and legal advisors regarding your particular circumstances. All companies are located at 1290 Avenue of the Americas, New York, NY For costs and complete details of coverage, call your life- and health-insurance-licensed financial professional. Long-Term Care Services SM is a service mark of AXA Equitable Life Insurance Company. 10% 2010 AXA Equitable Life Insurance Company and MONY Life Insurance Company of America. All rights reserved. Cert no. SW-COC Avenue of the Americas, New York, NY 10104, (212) G23877 GE (4/09) Cat. # (2/10)

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